At a Glance

Debt consolidation loans are a popular option for people looking to streamline and consolidate credit card debt. But what if you have a balance on a loan but not on your credit cards? If you need to pay off a loan, you may be wondering if you can pay off a loan with a credit card. Ultimately, that answer depends on the type of loan and the lender. Here’s what you need to know.

When to pay off a loan with a credit card?

Technically, you may be able to pay off certain loans with a credit card. Many loans, like personal loans, payday loans, or auto loans, may accept credit card payments or allow you to transfer the balance of the loan to a credit card.

But better than asking can you pay off a loan with a credit card is, should you?

It likely only makes sense to pay off a loan using a credit card when you have an interest-free offer on the credit card you plan to use. And on top of the 0% APR offer, you’ll need to ensure you’ll be able to pay down the balance on the card during the interest-free period, which is typically one year.

There are only a few instances where it makes sense to pay off a loan with a credit card.

Pros and cons of using a credit card to pay loans


  • You may save money in interest. If you’re moving the balance from a high-interest loan, like a payday loan, to a low- or zero-interest credit card, you may end up saving a significant amount of money in interest.
  • You can take advantage of 0% APR offers. If you’ve been working to improve your credit score since you initially took out a loan, you may now be eligible for 0% APR offers through a credit card company. Keep in mind that these are introductory offers and typically expire within 12-18 months.


  • Your credit may take a hit. By closing out a loan, you’ll be lowering your credit mix and may also be increasing your credit utilization on your credit card beyond the recommended 30% threshold. Each of these factors could cause a dip in your credit score.
  • Fees may add up. The cost of a balance transfer can be up to 3-5% of the loan amount. This fee can sometimes be so high it slashes any savings you might have had in interest.
  • You’re shifting debt instead of paying it off. Keep in mind that when you pay off a loan using a credit card, it’s not actually paying off anything. You’ll simply be transferring the balance from the existing loan to a credit card. Before you shift the balance, it may be best to assess options for how to pay off debt, which can be a better financial move.

How to use a credit card to pay loans?

The process of paying off loans using a credit card involves making a balance transfer transaction. Here are the steps you’ll take if you decide to use your credit card to pay off a loan.

1. Call your lender. If you want to use a credit card to pay off a loan, the first step is to contact your lender. They’ll be able to advise on whether credit card payments are accepted, and if so, how much you can pay using a card.

2. Calculate your savings. Compare how long it will take to pay off debt in your current situation vs. how long it will take to pay it off if you transfer the balance to a credit card. A loan repayment calculator can help you compare the two options side by side.

3. Assess interest and fees. You may be assessed a transfer fee for moving the balance from your loan to a credit card. You’ll want to consider this cost as it can sometimes be up to 3-5% of the amount transferred, which could cut into what you’ll save on interest.

4. Check the promotional window. Many balance transfer cards offer a 0% promotional window for a set period. Read the fine print to determine the length of the interest-free period and any other applicable fees.

5. Execute the balance transfer. Once you’ve confirmed your lender accepts credit card payments, the interest and fees are reasonable, and you’ll be able to repay the credit cards during the promotional window, it’s time to complete the transfer. Work with your credit card company and loan provider to ensure the loan is paid in full, and the balance now shows on your credit card.

6. Aggressively pay off credit card debt. Once the balance is successfully transferred, begin making payments toward your credit card. Be sure to pay off the debt fast during the promotional window or have a plan in place to deal with credit card debt when promotions expire and the interest rate spikes.

Alternatives to Paying Off a Loan With a Credit Card

Generally, paying off debt with another form of debt isn’t the best choice. If you’re contemplating using a credit card to pay off a loan, first:

  • Talk to your lender: If you’re struggling to make payments, talk to your lender about establishing a different payment plan or options to lower your interest rate.
  • Refinance: If your credit score has improved, you may be able to refinance to a new loan term that’s more favorable. As a result, you could face lower interest payments and no longer need to consider using a credit card.
  • Address underlying financial issues: If you’re struggling to pay off a loan because of overspending or financial mismanagement, it may be best to address the root cause of those issues first. Transferring debt to a credit card won’t help you make monthly payments if you’re not able to now. Debt repayment strategies like the debt snowball and debt avalanche can help you focus and attack debt in an intelligent way. Then, if needed, consider enlisting a financial professional to help you decide which debt to pay off first, develop good spending habits, and put you in a financial position to pay off your current loan.
Paying off a loan with a credit card isn’t your only option. Look to other methods of repayment first.


Federal student loan providers are unable to accept payment using a credit card. But if you have student loans through a private lender, you may be able to make a payment with a credit card. Keep in mind that if you choose to balance transfer your student loans to a credit card, you lose leverage to negotiate with your loan provider if you run into a hard time and have trouble paying what you owe. In addition, the credit card company may be far less lenient than a student loan provider and not as amenable to cutting you a break in payments or interest.

Many auto loan companies will accept credit card payments. However, before you choose this option, know that you’ll be moving your debt from a secured loan to an unsecured line of credit. And that means if you fail to make payments, you could face severe damage to your credit score as the lender no longer has an asset to repossess if you can’t make payments.

As long as the loan amount is within your available credit card limit, you may be able to pay a bank loan with a credit card. Whether you should do so depends on how much money you’d be able to save once you factor in balance transfer fees. It may end up saving you more money refinancing a loan as opposed to moving the balance to a credit card, so assess that option as well before you make a decision.

Payday loans tend to have a high interest rate, even higher than those of many credit cards. For that reason, paying off a payday loan with a credit card could end up saving you money on interest and prevent additional fees from piling on. If you choose to pay off your payday loan with a credit card, be sure you have a plan in place to repay the balance due quickly. Doing so will ensure you’re still getting a good deal despite the balance transfer cost, which can be 3-5% of the loan.

It’s popular to use personal loans to pay down credit card debt. But if your credit cards have sufficient space available and you won’t hit your credit limit, you may be able to do the reverse and pay off a personal loan with a credit card. First, you’ll want to do the math to be sure it’s worth it. You’ll likely need to use either a credit card balance transfer or convenience check, each of which could come with additional fees. Once you factor in the cost of transferring funds and the money saved on interest, you’ll be able to make a smart decision about if it’s best to pay off your personal loans with a credit card.